Why SBI Cards is an 'avoid' despite strong earnings

Past perfect, present tense and future is highly uncertain for SBI Cards

August 24, 2022 / 05:32 PM IST
Why SBI Cards is an 'avoid' despite strong earnings

Given its portfolio composition, any downturn in retail credit cycle can hit SBI Cards the most

PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

SBI Cards and Payments Services (CMP: Rs 910, Mcap: Rs 85,820 crore) has significantly underperformed the broad benchmark in the past one year. While the Nifty has risen 6 percent in the past one year, SBI Cards is down 10 percent in the same period. The stock performance of the second-largest player (in terms of credit cards in force and spends) in the country has been lacklustre despite delivering robust earnings in the last reporting quarter ended June ’22. Though...

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